Rather, it comes down to what's financially prudent for
businesses in the wake of a crisis.

"Following the disruption in credit markets typical of financial
crises, collateral requirements drastically change and loans are
biased towards projects and firms possessing easily recognisable
collateral, associated with tangible assets, which can be defined
as ‘intrinsic collateral’. Projects involving the
creation of new jobs are generally cut off from financing, as
they possess little ‘intrinsic’ collateral, and thus the recovery
of output tends to be jobless.

How do we get around this? Well, a bit of inflation would
probably be quite useful...

"The empirical evidence does not bluntly contradict the existence
of a long-run vertical Phillips curve (of unemployment versus
inflation) around the pre-crisis rate of unemployment. But, it
also suggests that a sharp dosage of price inflation for a
limited period of time may go a long way to restoring full
employment after financial crises, albeit at the cost of lower
real wages.

...But would come with a host of problems:

"We hasten to say, though, that these observations do not
lead us to urge Mr Bernanke to take the high-inflation
road.

Firstly, because he would probably lose his job and be
replaced by a mindless hawk.

Secondly, and of greater substantive relevance, because a
spike in dollar inflation could seriously jeopardise the
credibility of the strongest global currency, a pivotal anchor of
the world economy.

Thirdly, because inflation is not a regular tax; once the
genie is out of the bottle it may take a life of its own
(emerging markets offer plenty of examples for disbelievers).

So what's the answer? Liquidity and credit.

"[The Fed should] coordinate another large quantitative easing
operation with the ECB in order to restore the stock of ‘safe
assets’ (see Barclays
Capital 2012, Gorton et al. 2012, IMF 2012), and help reactivate
the credit market by speeding up bankruptcy procedures. Restoring
safe assets is not inconsistent with expansionary monetary policy
or high fiscal deficits (see Barclays Capital 2012), but it also
includes structural reforms aimed at reestablishing credibility
in capital markets.